U.S. Jobs Data, the Federal Reserve, and Gold

After a couple weeks of solid gains for gold, the yellow metal fell about $30 per ounce during the morning hours of trade. A report by the U.S. Labor Department may give the Federal Reserve enough reason to slow down its ongoing monthly bond buying program. Today’s slip in prices for precious metals reflects investors’ worries over what the Fed may do.

Job Data

The figures that came from the U.S. Labor Department today were better than expected. The payroll employment for the month of May increased up to 175,000. Previous predictions and polls suggested this increase to be closer to 164,000. The unemployment rate only increased by a tenth of a percentage point to 7.6% which was barely significant.

The Federal Reserve

The Federal Reserve has stated multiple times it will slow their quantitative easing program when real signs of progress in the American economy are seen. As it turns out, the recent job data is only moderately good news. Experts believe that had the payroll employment been much higher and unemployment rates lower, it would be almost certain the Fed would begin to slow the economic stimulus. Had this been the other way around, it would almost guarantee the Fed would continue their stimulus efforts. As it stands now, this data suggests the American economy is turning around, but not enough for the Federal Reserve to make a conclusive decision about prolonging the economic stimulus program.


Today’s drop in gold prices is reflective of what the Federal Reserve may decide to do. The forced inflation in place by the Fed is certainly good news for gold as many investors see the yellow metal as a safe haven. It’s no doubt investors will be listening closely to what is said in the next Federal Reserve meeting.

Regardless of the outlook of gold, the prices at the moment have created a sizeable physical demand. The first quarter saw increases from China and India. Furthermore, the U.S. Mint has even had issues in keeping up with the demand of precious metal coins.

If you are curious about adding precious metals to your retirement account American Bullion can help. Call us today at 1-800-326-9598 and speak with one of our knowledgeable specialists. You can roll over or transfer any portion of your existing IRA or old 401(k) from a previous employer into a precious metals IRA. The rollover is tax-free and hassle-free.

References: ProactiveInvestors, TradetheNewsroom